The growth of e-business and thecontinuing rise in the volume of online transactions has given consumers more contact points with companies than ever before. These days, "e-customers" operate in a multichannel universe with the ability to solicit information via phone, fax, e-mail, Web sites, online chat groups, VOIP (voice over IP) calls, and even old-fashioned face-to-face communication.
This array of communication channels has given rise to a new demand-based business model in which customers determine how, when, and where they will be served.
Unfortunately, this creates a business dilemma. Companies must develop a strategy to provide the same level of service to customers across all their communication channels, or risk losing customers to the competition.
Statistics surrounding the effect of customer retention on the bottom line are telling. According to a study by Jupiter Communications, an Internet commerce researcher in New York, companies can boost profits by almost 100 per cent by retaining just 5 per cent more of their customers.
With this in mind, organisations are turning toward e-CRM (electronic customer relationship management) products as an option to help keep a watchful eye on their customer base. In addition to increasing customer service efficiency, these solutions can help grow brand awareness, foster product loyalty, and promote cross and up-selling (the process of suggesting new, more expensive items to a customer related to the customer's past purchases).
Here's an example of how a properly implemented e-CRM system at an on-line bookseller, such as Amazon.com, might work. The system would automatically allow a customer to check on the status of a book order via phone or e-mail (customer service), offer discounted coupons to other books by the same author (cross-selling), and provide free shipping on orders placed on a customer's birthday (brand loyalty).
Underscoring the growing importance of e-CRM is the emergence of a whole raft of e-CRM options and services flooding the marketplace. Many of the industry's major software players have weighed in with in-house e-CRM offerings. For example, Hewlett-Packard offers HP Front Office (www.hp.com/esy/smartcontact/FO_SOLU.html), an Internet-based CRM package that integrates the three areas of marketing, sales, and support. IBM (www.ibm.com/ebusiness/crm), on the other hand, has more than 40 products in its CRM portfolio that encompass a wide range of customer service needs. These compete directly with other large-scale products from companies such as Siebel Systems, Baan, Lucent Technologies, and Oracle.
One of the main problems is that rolling out one of these enterprise applications can be quite costly and resource-intensive. As an alternative, some sites are turning their attention to e-CRM services offered via ASPs (application service providers). Under this guise, you can outsource some or all of your customer service offerings - usually for a much lower price.
In addition to its sales and marketing hooks, a main ingredient of an e-CRM solution is the capability to enhance customer service - a key to customer retention. For the most part, these customer service features fall into one of three categories. Some products specialise in one area, while large-scale services and software suites encompass all three.
These included self-service solutions, that empower customers to try solving problems and responding to information requests on their own. Access to services such as online knowledge bases, product configuration utilities, interactive question-and-answer forms, discussion groups, and dynamically generated FAQs are all variables in the self-service equation.
A second tier of services revolves around e-mail management. Solutions intelligently queue and route incoming e-mail queries to appropriate customer service representatives for personalised responses. Anyone who has been lost in the customer service e-mail shuffle that plagues many e-businesses should recognise the value of this service.
Last, real-time implementations provide collaborative customer services that are browser-based. These include text chat, VOIP, document and browser sharing, and shared application control.
A properly integrated e-CRM service will successfully blur the line between your entire supply chain and your customers. Ultimately, this can provide superior service, additional revenue streams, and a competitive advantage.